North Korea Reactor Shutdown Looms

Kerr, Paul, Arms Control Today

International Atomic Energy Agency (IAEA) officials visited North Korea in late June, almost two weeks after Pyongyang agreed to finish implementing a February pledge to halt its nuclear reactor. Another meeting of six-party talks designed to resolve the North Korean nuclear crisis may take place in July, but no firm date has been set.

An IAEA team led by Olli Heinonen, deputy director-general for safeguards, was scheduled to arrive June 26 in Pyongyang. North Korea invited the agency in a June 16 letter after a North Korean banking dispute moved toward resolution.

Heinonen told reporters June 23 that "[t]he purpose of the trip is... to negotiate details" about verifying and monitoring the shutdown of North Korea's nuclear facilities located at Yongbyon, according to Reuters. IAEA Director-General Mohamed ElBaradei held initial discussions with North Korea about the issue in March. (See ACT, April 2007.)

Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill told reporters in Tokyo June 23 that North Korean officials indicated during a bilateral meeting in Pyongyang that the country would shut down its operating, graphite-moderated nuclear reactor within approximately three weeks.

Hill met with North Korean Vice Minister Kim Gye Gwan and North Korean Foreign Minister Pak Ui Chun during a June 21-22 visit to Pyongyang. The visit was the first by a U.S. official in Hill's position since his predecessor, James Kelly, went to Pyongyang in October 2002. National Security Council official Victor Cha visited North Korea this past April.

A June 16 report from the state-run Korean Central News Agency said that Pyongyang invited the agency because "the process" of resolving the Macau-based Banco Delta Asia dispute had reached the "final phase."

North Korea agreed in February to halt within 60 days the operation of the Yongbyon reactor and associated reprocessing facility, which is used to separate plutonium from spent reactor fuel, as well as "invite back IAEA personnel to conduct all necessary monitoring and verifications." But Pyongyang refused to shut down the facilities because it contended the bank issue had not been resolved.

The Department of State argued in April that the matter had been resolved as the bank had "un-blocked" the relevant North Korean accounts earlier that month. But North Korea said a resolution requires that the funds first be transferred.

Subsequent difficulty in conducting that transaction delayed resolution of the issue. After several false starts, the funds were ultimately transferred to a Russian bank in which North Korea reportedly holds an account. The funds were transferred via the U.S. Federal Reserve Bank and the Bank of Russia. A June 25 North Korean Foreign Ministry statement acknowledged that the funds had been transferred, "thus settling the controversial issue."

Since September 2005, the bank matter had been a persistent obstacle to progress in the six-party talks, which also include China, Japan, and South Korea. That month, the U.S. Department of the Treasury designated Banco Delta Asia as a "money laundering concern." The bank subsequently froze North Korea's accounts, and other financial institutions curtailed their dealings with Pyongyang. The United States has asserted that the bank provided financial services to North Korean government agencies and front companies engaged in illicit activities.

Next Steps

IAEA spokesperson Melissa Fleming told Arms Control Today June 25 that the agency expects its team "to come back with agreed modalities" for verifying the shutdown. The IAEA Board of Governors must approve these plans "because this is a special verification mission," she said. …

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